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Pound For Pound, A VA Streamline Refinance Stacks Up Nicely When Compared With Conventional Alternatives

12 Mar Posted by in Mortgage Reduction Updates | Comments
Pound For Pound, A VA Streamline Refinance Stacks Up Nicely When Compared With Conventional Alternatives
 

By Hazel D. Seidman

The Internet, television stations and radio airwaves are abuzz with advertising about mortgage refinancing. However, all eligible veterans should first consider the VA streamline refinance when looking for a suitable loan product. In fact, let’s take a moment to compare the differences between the VA streamline refinance and traditional mortgage refinance, before you apply for your loan.

To start, it should be noted that traditional mortgage refinancing options are not designed with the veteran borrower in mind. These restrictions make it hard for veterans to receive loan approval without encountering barriers such as lower LTVs, credit prequalification, upfront costs, higher interest rates and prepayment penalties. In a nutshell, the traditional borrower has to clear many more hurdles in pursuit of loan approval.

To the contrary, a VA streamline refinance, also known as an Interest Rate Reduction Loan (IRRL), is exceptionally borrower-friendly and accommodating. The first thing that veterans should focus on is that VA loans are specifically designed to meet their needs. What’s more, VA loan guidelines do not require borrower’s to qualify based on credit or assets, and there may even be no appraisal requirement (upside down equity is okay!) Veterans with credit scores below 640 also have an opportunity to apply and receive financing approval! But these things aren’t the only benefits associated with a veteran refinance loan. As a qualified veteran, you can expect to pay minimal or no out-of-pocket expenses, and may be eligible to defer two mortgage payments or closing costs into the loan transaction. Now these are cost savings conventional mortgages simply fail to beat. Dollar for dollar, loans specifically designed for veterans are the better value.

And if you were thinking that this whole process only benefits the veteran borrower, think again. If you were unaware, banks have a very special reason for offering VA loan products. Since the passage of the Service men’s Readjustment Act of 1944, the VA has guaranteed a portion of VA loans; thus lowering the lender’s risk. This reduced risk on the part of the lender translates into lower interest rates for you. Undoubtedly, your VA mortgage rate will be lower than conventional, refinance alternatives.

These comparisons make it clear why veteran mortgages are so attractive. If your objective is to lower your mortgage interest rate and save on out-of-pocket expenses, all with little or no hassle, a VA streamline refinance is waiting for you. To obtain more information about the benefits of VA loans, contact an approved lender in your area or visit the Veteran’s Administration Department website.

VA Home Loan program makes it easier for veterans to qualify for home financing with less stringent income and credit qualifications; just check out streamline refinance and you may also check out va refinance.

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